Mahindra & Mahindra, India's largest maker of utility vehicles and tractors, is close to acquiring a stake in the company that owns Swedish auto maker Saab Automotive, the Dow Jones Newswires reported, citing court documents.
National Electric Vehicle Sweden (NEVS) is owned by National Modern Energy Holdings, a Chinese-Japanese energy company having its headquarters in Hong Kong. NEVS took control of the auto maker by acquiring the assets of Saab Automobile, Saab Automobile Powertrain, and Saab Automobile Tools from a bankruptcy estate.
Mahindra had evinced interest in Saab in 2012. NEVS bought out the business at that time but ran into financial difficulties on its own, putting the company again in bankruptcy on August 28, 2014. In a petition filed before a court by one of the creditors of NEVS, Mahindra was named as the auto maker about to take a stake in the Swedish company, the report said. Chinese car maker Dongfeng was also in the race, according to previous reports.
In a disclosure to the court last week, NEVS said talks with potential investors were close to completion. In its court filing, NEVS said it is in negotiations with an Asian original equipment maker, which plans to step in as majority owner in the company, the newswire said.
A Mahindra spokesperson said the company wouldn't offer any comments on the report. Previously, the company had informed the Bombay Stock Exchange that it examines or pursues "various opportunities in different areas, from time to time on a continuing basis and (one) can't comment upon every opportunity at every stage."
Experts say, M&M somehow is becoming an expert at picking up distressed assets and quickly bridging the technology gap that exists.
According to an analyst at domestic brokerage house, if Mahindra buys NEVS, it stands to gain from the Swedish company's engine design and technology than full-fledged products. According to him, this seems like a similar sort of arrangement it has with Peugeot on two wheelers — Mahindra acquired a 51 per cent stake. The company had also bought Korean auto maker Ssangyong. "This buy may help M&M to leap-frog on the product development life cycle, which is the need of the hour for the company."